LCI Industries (NYSE: LCII) and Polaris Industries (NYSE:PII) are both mid-cap auto/tires/trucks companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Profitability

This table compares LCI Industries and Polaris Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LCI Industries 7.07% 23.60% 16.10%
Polaris Industries 3.90% 33.81% 9.35%

Earnings and Valuation

This table compares LCI Industries and Polaris Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LCI Industries $1.68 billion 1.90 $129.67 million $5.61 22.77
Polaris Industries $4.52 billion 1.75 $212.94 million $3.18 39.64

Polaris Industries has higher revenue and earnings than LCI Industries. LCI Industries is trading at a lower price-to-earnings ratio than Polaris Industries, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for LCI Industries and Polaris Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LCI Industries 1 0 3 0 2.50
Polaris Industries 2 12 2 0 2.00

LCI Industries currently has a consensus target price of $123.00, indicating a potential downside of 3.72%. Polaris Industries has a consensus target price of $99.23, indicating a potential downside of 21.28%. Given LCI Industries’ stronger consensus rating and higher probable upside, equities research analysts plainly believe LCI Industries is more favorable than Polaris Industries.

Volatility & Risk

LCI Industries has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Polaris Industries has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Dividends

LCI Industries pays an annual dividend of $2.20 per share and has a dividend yield of 1.7%. Polaris Industries pays an annual dividend of $2.32 per share and has a dividend yield of 1.8%. LCI Industries pays out 39.2% of its earnings in the form of a dividend. Polaris Industries pays out 73.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. LCI Industries has raised its dividend for 5 consecutive years.

Insider & Institutional Ownership

99.6% of LCI Industries shares are held by institutional investors. Comparatively, 91.1% of Polaris Industries shares are held by institutional investors. 3.6% of LCI Industries shares are held by insiders. Comparatively, 2.2% of Polaris Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

LCI Industries beats Polaris Industries on 11 of the 17 factors compared between the two stocks.

About LCI Industries

LCI Industries, formerly Drew Industries Incorporated, through its subsidiary, Lippert Components, Inc. and its subsidiaries (LCI), supplies an array of components for the original equipment manufacturers (OEMs) of recreational vehicles (RVs) and adjacent industries. The Company’s segments include OEM Segment and Aftermarket Segment. The OEM Segment manufactures or distributes an array of components for the OEMs of RVs and adjacent industries, including buses; trailers used to haul boats, livestock, equipment and other cargo; pontoon boats; manufactured homes; modular housing, and mobile office units. The Aftermarket Segment supplies components to the related aftermarket channels of the RV and adjacent industries, primarily to retail dealers, wholesale distributors and service centers. The Aftermarket Segment also includes the sale of replacement glass and awnings to fulfill insurance claims.

About Polaris Industries

Polaris Industries Inc. designs, engineers and manufactures powersports vehicles, which include Off-Road Vehicles (ORV), including All-Terrain Vehicles (ATV) and side-by-side vehicles for recreational and utility use; Snowmobiles, Motorcycles and Global Adjacent Markets vehicles, including Work and Transportation and military vehicles. The Company’s segments include ORV/Snowmobiles, Motorcycles, Global Adjacent Markets, and Other. Its ORVs includes the RZR sport side-by-side, the RANGER utility side-by-side, the GENERAL crossover side-by-side, the Sportsman ATV and the Polaris ACE. It produces a range of snowmobiles consisting of approximately 40 models. It offers a range of motorcycles under Indian motorcycles and Slingshot brands. The Global Adjacent Markets vehicles include low emission vehicles, light duty hauling, passenger vehicles and industrial vehicles. The Other segment includes business of TAP Automotive Holdings, LLC, a manufacturer of off-road Jeep and truck accessories.

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